Then It's Agreed: Germans Can Stop Agreeing So Much

Joblessness has hit record postwar heights. The deficit is creeping up. The prosperity painstakingly built from World War II's wreckage has lost some of its shine. Europe's dominant economy has slowed to the point that Germany is not meeting the strict conditions it helped set for a united Euro-currency.

And Germans are worried about the future - so worried they are questioning their leaders' attempts to keep Germany globally competitive. One sign of their disquiet: Only 26 percent support Chancellor Helmut Kohl's attempt to help businesses be more flexible and lay workers off, according to an EMNID/n-TV poll.

Such public resistance to government may reflect an end to some deep cultural traditions in Germany: of acting by consensus - of making economic decisions at round tables involving labor, business, and government leaders.

Since World War II, they have never voted a sitting chancellor out of office. And some historians argue that German hesitancy to criticize their leaders helped Hitler keep his hold on power during the war.

The German experience in trying to restructure its economy could have have important lessons for other industrialized nations that are trying to prosper under relentless global competition, without sacrificing their social safety nets.

Tomorrow, more than 200,000 protesters organized by the DGB labor federation are expected to descend on Bonn for demonstrations - the largest ever in postwar Germany, DGB chief Dieter Schulte predicts.

"Social peace in the Federal Republic [of Germany] has been dependent on compromises by both sides. But now all the [labor] compromises are being made in favor of the employers.... This is really something new in the postwar history of Germany," says Wolfgang Thierse, a deputy leader of the Social Democrats in the Bundestag (lower house of Parliament).

Economists and others who do not have to run for reelection agree with the gist of Chancellor Kohl's business-friendly plans for the German economy. If Germany is to remain competitive, they say, labor must become more flexible and whole sectors of the economy must be deregulated.

The factors prompting Kohl's plans have developed over several years: Fewer jobs are being created, even when the economy is expanding; and reunification in 1990 with the former East Germany has been expensive.

But without the public behind Kohl, and with even his own Christian Democratic Party nearly split over whether to support him, it's unclear how much headway Kohl will be able to make.

At the same time, if Kohl does not enact his reforms quickly, it's uncertain Germany will be able to meet the criteria to join Europe's currency in 1999. Germany is already unable to meet the budget-deficit limit, set at 3 percent of gross domestic product.

The single Euro-currency is the next big milestone for European integration. And in his quest for ever-deeper European unity, the single currency is a goal that Kohl wants to meet very badly.

Heiner Geissler, a deputy leader of Kohl's Christian Democratic Party in the Bundestag, dismisses as "laughable" the claim that Kohl's resolve represents the end of consensus in German society. "This package changes nothing in the substance of the welfare state," he says.

That's just the problem for some business leaders: Acting on consensus means nothing changes. They worry that Kohl's plans will get watered down.

"We hold onto our rules, and then when we finally decide on a reform, we get one twentieth, or maybe one fifth, of the reform we need," says Roland Berger, a Frankfurt-based management consultant.

Jrg van Essen, chief whip of the centrist Free Democrats in the Bundestag, says that Germany is still a consensus society. "But that assumes that all parties to the discussion can read the signs of the times," he adds. For him, those signs point toward Kohl's savings package.

Germany has been in recessions before, but nowadays the threat to jobs runs deeper: A reliable supply of cheap labor is available in countries like Poland and the Asian "tiger" economies. When Germany gets too expensive, businesses can pack up and move. "That wasn't an option 20 years ago," says Mr. van Essen.

Other political leaders see the race to reduce labor costs as misguided. "There have always been countries with lower labor costs," says Mr. Thierse, the Social Democrat deputy leader. He says innovation and further integration within the EU would help ensure the nation's economic success.

Adrian Ottnad, senior economist at the Institute for Economic and Social Research in Bonn suggested that this may be the time for Germany to form a new social standard: "We always tried to have a consensus, but ... these roundtables compromises were often reached at the expense of third parties not at the table ... such as the unemployed, the investors, and the taxpayers."

He and other economists often point to the example of Ludwig Erhard, architect of Germany's postwar "economic miracle," in calling for a "return to real consensus." During the 1960s and 1970s, the "social-market economy" that Erhard envisioned evolved into a welfare state, Dr. Ottnad says. Economic growth was maintained by deficit spending, piling up public debt: from under 20 percent of gross domestic product in the mid-'60s to nearly 62 percent today.

But for many, the German yearning for consensus extends beyond economics. Manfred Gllner, director of the Forsa Institut in Berlin, had a darker view of "consensus" in Germany - that it has represented tacit agreement not to discuss painful subjects. During the first years of postwar Germany, for instance, officials' Nazi pasts "were not discussed."

Maybe there was "no alternative" to the lack of debate as Germany struggled to get back onto its feet again, Mr. Gllner says. But he adds that during the war, "every mayor knew the schedule for the trains leaving the station for the concentration camps."

But he is more hopeful that the public will agree today that public finances must be brought into better order. "I see signs of a recognition that a new consensus is needed - that it's not just a bigger West Germany, but that a new German unity has to be brought into being," Gllner adds.